banking

Recent upheavals in the banking industry have sharpened the regulatory gaze for 2023. Regional banks have the usual complex interplay of state, federal and international compliance requirements, but those are further complicated by the likelihood of intensified regulatory oversight, and the potential for additional regulations. Industry watchers predict that some rules will see modernizations while others will be replaced altogether. 

Knowing what’s coming, now is the perfect time to gain a firm, proactive grasp of your compliance stature. As always, responding quickly and efficiently to change will be key to maintaining compliance, but shifting from reactive to proactive mode will greatly simplify any adjustments new regulations might require.

Per Deloitte, the following areas will be key to regulatory oversight:

• Demand for better data governance and reporting – Increasing data availability and improving data quality as critical priorities for banks. As bank regulators become more data dependent, they are driving the already high prioritization of strategic data programs at the banks they supervise.
• Cyber and information technology (IT) risk – Deficiency in effective cybersecurity policies and procedures to secure organization assets and data is an increasing concern of regulators. 
• Consumer protection and financial inclusion – We expect regulators’ continued momentum in protecting against consumer harm in 2023, especially at the margins of the regulatory perimeter.

An organized compliance regimen will help you not only maintain compliance in all of these areas of oversight, but also help you quickly adapt when they change. Ascent recently published the Regulatory Compliance Confidence Scorecard designed to help identify gaps and areas for improvement in banks’ compliance environment.

The Scorecard measures organizational principles. For instance, are your corporate legal entities defined, and are laws, rules and regulations identified and mapped to those  entities, products and services? The Scorecard questions are based on principles that provide a sound foundation for ensuring the quality of compliance data. 

With rigorous organization of business entities against applicable rules and regulations, plus automatic notification of new enforcement actions or guidance relevant to your entities, you’re in an excellent position to measure new rules against ongoing business and strategic initiatives. 

You can prepare to accommodate changes quickly and with minimal internal disruptions through a clear understanding of the current nexus between your organization, its entities, its products, and the rules that apply to each.

For instance, recent failures in the banking industry have opened discussions about new regulations or extending regulations that currently apply to large institutions to regional banks as well. A sound compliance organizational structure will greatly simply accommodating whatever new guardrails go up, saving your time and money, and of course, minimizing the risk of non-compliance.

Events suggest that 2023 will be a significant year for regulatory change. Consult the Regulatory Compliance Confidence Scorecard [link] to assess your bank’s ability to deal with what’s coming. If you come up short, you’ll know it’s time to prepare and get organized. 

For more information on improving compliance readiness, feel free to shoot us a line at sales@ascentregtech.com.